Private equity investment booms in Europe

Last year, private equity investments into central Europe reached their highest level since the financial crisis in 2009, according to a new report from Invest Europe (formerly the European Private Equity & Venture Capital Association).

Hitting a new high of €1.6 billion, the private equity market surpassed the figures from the previous year but still failed to reach the peak of €2.5 billion achieved before the financial crash in 2008.

According to Robert Manz, chairman of the Central and Eastern Europe (CEE) task force at Invest Europe, much of the positivity in the market has been driven by a sustained economic boost in the region.

"I think that what is driving the interest is the good macroeconomic data coming out of the region, as well as the fact that there have been a series of successful exits with the proceeds flowing back to investors," he said.

"We expect 2017 to be even stronger than last year as there are a couple of big fund managers in the market raising money."

According to the data released in the report, central Europe's economics have grown significantly in the past few years as a result of high domestic demand, a rise in exports and the fact that interest rates have reached record lows.

In fact, Romania was found to have grown 5.7 per cent year on year in the second quarter of the year, followed by Poland, the Czech Republic, Hungary and Slovakia. However, the report revealed that CEE countries still only represent around three per cent of the European total as a whole.

Despite the growth statistics, Poland remained the leading country for private equity investment activity in the region in 2016, and was found to be home to almost a quarter of all European countries that received funding and to account for 45 per cent of the region's total investment value.

Among the private equity investments made across Europe, consumer goods and services was the sector found to be of most interest, attracting around 23 per cent of investment. In second place was information and communication technology, which saw around 22 per cent of interest.

According to the report, 2016 saw venture capital investments remain stable across Europe, reaching €100 million and equalling the level recorded in 2015. Similarly, buyout investments remained stable compared to the previous year at €1.2 billion. Figures showed that growth capital funding remained Europe's second most significant private equity type €285 million, marking a 16 per cent rise compared to 2015.

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